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Ann: Intention to Make Takeover Bid, page-100

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Teddybear123

3,130 Posts.

361

22/03/23

12:58

Post #: 66898999
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Originally posted by Fredbear2: ↑

Great analysis.

I think one point people fail to appreciate is that you don't need 90% or 75% or even 50% to get control. Wyloo with the bid is trying to replicate what Seven Group did for Boral. If you get around 35-40%, you effectively got control of the company, as only around 70-75% typically vote at General Meetings (so 40%/75% = 53%, which means you can get through any ordinary resolutions of sharheolders). If Wyloo gets to 35-40%, you can expect Wyloo to convene a general meeting to appoint his nominated directors. If he gets the majority of directors, the Directors appoint a new CEO who largely does their bidding. Of course there are minority shareholder protections, and they have to be careful what they do, but look at Genesis and the Dacian takeover. Major institutions sell out, as the change of control premium has now gone and at the behest of new management. As they sell out, Wyloo may get above 50%, then get to 75%. Its a slow death for retail shareholders from that point - no liquidity and little prospects anyone else is interested in buying the stock. You can bet only scant information flow on the ASX.

Ultimately, Wyloo wants the ore to go to IGO so they can underwrite the nickel sulphate plant, which is likely a few years away.

BHP is not bidding - this is a lose lose situation for them. Can't get control without overpaying, and they can't mine if they do (BHP cannot mine narrow orebodies with their overheads - this is why WMC sold it in the first place). They want to secure supply but should have thought about a longer term agreement. Any renegotiation of that contract would likely require shareholder approval given the bid by Wyloo - you can bet Wyloo would go to Takeovers Panel for a frustrating action.

Mincor let the wolf in the door with the last equity raise - allocating far too much - short term price bump for long term pain. Wyloo was never going away and only waiting to pounce.

I watch this as a holder of LM8.

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so why is the price trading today 10% above the offer??

MCR Price at posting: $1.53 Sentiment: Buy Disclosure: Held
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0 Great analysis

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